Accounting for excellent

Maga Company, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price

$

17

3

 U

nits in beginning inventory

0

  Units produced

3,510  

  Units sold

3,240  

  Units in ending inventory

270  

  Variable cost per unit:

  Direct materials

47  

  Direct labor

56  

  Variable manufacturing overhead

12  

  Variable selling and administrative

14  

 F

ixed costs:

  Fixed manufacturing overhead

10

8

,810  

  Fixed selling and administrative

9,720  

Required:

a.

What is the unit product cost for the month under variable costing? (Do not round intermediate calculations. Omit the “$” sign in your response.)

Cost per unit

  Variable costing

$

b.

What is the unit product cost for the month under absorption costing? (Omit the “$” sign in your response.)

  Absorption costing

c.

Prepare a contribution format income statement for the month using variable costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the “$” sign in your response.)

Variable Costing Income Statement

  Variable expenses:

  Fixed expenses:

d.

Prepare an income statement for the month using absorption costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the “$” sign in your response.)

Absorption Costing Income Statement

  Selling and administrative expenses

:

e.

Reconcile the variable costing and absorption costing net operating incomes for the month. (Omit the “$” sign in your response.)

Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes

  Variable costing net operating income

  :

  Absorption costing net operating income

Yoke Corporation has provided the following data from its activity-based costing accounting system:

  Supervisory wages

83,200  

  Factory Utilities

3

37

,000  

Distribution of Resource Consumption across Activity Cost Pools:

   Activity Cost Pools

  Batch
set-ups

  Unit
Processing

  Other

  Total

60

%

100

33

59

%  

The “Other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.

Determine the total amount of supervisory wages and factory utilities costs that would be allocated to the unit Processing activity cost pool. (Omit the “$” sign in your response.)

  Total amount

Determine the total amount of supervisory wages and factory utilities costs that would be allocated to the Other cost pool. (Omit the “$” sign in your response.)

Randall Company is a merchandising company that sells a single product. The company’s inventories, production, and sales in units for the next three months have been forecasted as follows:

October

November

December

  Beginning inventory

12,000   

  Merchandise purchases

62,000   

72,000   

3

7,000   

  Sales

42,000   

  Ending inventory

Units are sold for $11 each. One fourth of all sales are paid for in the month of sale and the balance are paid for in the following month. Accounts receivable at September 30 totaled $452,000.

Merchandise is purchased for $6 per unit. Half of the purchases are paid for in the month of the purchase and the remainder are paid for in the month following purchase. Selling and administrative expenses are expected to total $122,000 each month. One half of these expenses will be paid in the month in which they are incurred and the balance will be paid in the following month. There is no depreciation. Accounts payable at September 30 totaled $292,000 includes selling and administrative payables.

Cash at September 30 totaled $82,000. A payment of $302,000 for purchase of equipment is scheduled for November, and a dividend of $202,000 is to be paid in December.

Prepare a schedule of expected cash collections for each of the months of October, November, and December. (Omit the “$” sign in your response.)

Schedule of Expected Cash Collections

  September accounts receivable

  October sales

  November sales

  December sales

  Total cash collections

Prepare a schedule showing expected cash disbursements for merchandise purchases and selling and administrative expenses for each of the months October, November, and December. (Omit the “$” sign in your response.)

Schedule of Expected Cash Disbursements

  Total incurred

  Disbursements

, previous month

  Disbursements, current month

Prepare a cash budget for each of the months October, November, and December. There is no minimum required ending cash balance.  (Input all amounts as positive values. Omit the “$” sign in your response.)

Randall Company
Cash Budget

  Beginning cash balance

  Add cash receipts

  Total cash available

       Accounts payable

       Payment for equipment

       Payment for dividend

  Total disbursements

  Ending cash balance

Tajiri Corporation

uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of May:

For the Month Ended May 31

Planning
Budget

Actual
Results

Variances

  Customers served

34,000  

35,000  

  Revenue

(3.50q)

119,000  

122,600  

3,600

  Expenses:

  Wages and salaries

 ($23,400 + $1.24q)

65,560  

66,800  

1,240

  Supplies

($0.64q)

21,760  

19,560  

2,200

  Insurance

($5,300)

5,300  

  Miscellaneous

($4,300 + $.33q)

15,520  

13,320  

  Total expense

108,140  

104,980  

3,160

  Net operating income

10,860  

17,620  

6,760

1.

Complete the company’s flexible budget performance report for May. Label each variance as favorable (F) or unfavorable (U). (Input all amounts as positive values. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Omit the “$” sign in your response.)

Flexible Budget

Performance Report Part 1 & 2

Activity Variances

Revenue and Spending Variances

34,000  

122,600  

66,800  

19,560  

17,620